I do not own this stock of Bird Construction Inc (TSX-BDT, OTC-BIRDF). This was listed as a top stock in ETF of iShares S&P TSX Canadian Dividend Aristocrats Index. I had not heard of it before, so I decided to do a spreadsheet on this stock.
When I was updating my spreadsheet, I noticed that a great deal of the total return on this stock in the past came from dividends. With the dividends going down, this can no longer be the case. It I never a good sign when a stock cuts their dividends. On the other hand, this stock had cut dividends in the past.
The dividend yield on this stock has very greatly, but it has mostly been in the good range (5% over 5%), but has sometimes been in the moderate range (2% to 4% ranges). The current dividend is 5.62% with 5, 10 and historical yields at 5.69%, 5.70% and 5.86%. The dividends had a lot of nice increases at different points in time, but in 2015 and 2016 they were flat and then in 2017 they were decreased by 48.7%. They were flat in 2018 and 2019.
The Dividend Payout Ratios are problematic at present and therefore a dividend cut. The company is acting sensibly. There is obviously a current problem with the coverage for the dividends and so they have cut them. The DPR for EPS for 2018 cannot be determined due to an earnings loss. The 5 year coverage is 140%. The DPR for CFPS for 2018 is 136% with 5 year coverage at 36%. DPR for Free Cash Flow for 2018 is 64% with 5 year coverage at 131%.
Debt Ratios are low. I like to see a margin of safety in debt ratios. I like the Liquidity Ratio and the Debt Ratio to be at 1.50 or higher. The Long Term Debt/Market Cap Ratio for 2018 is 0.10 which is a good ratio. The Liquidity Ratio for 2018 is 1.15 with a 5 year median of 1.19. If you add in cash flow after dividends the ratio is 1.33 with a 5 year median of 1.32. The Debt Ratio is 1.26 with 5 year median of 1.28. The Leverage and Debt/Equity Ratios for 2018 is 4.79 and 3.79 with 5 year median at 4.54 and 3.54. These are a bit high.
The Total Return per year is shown below for years of 5 to 21 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
|From||Years||Div. Gth||Tot Ret||Cap Gain||Div.|
The 5 year low, median, and high median Price/Earnings per Share Ratios are 14.92, 19.37 and 23.83. The corresponding 10 year ratios are 13.01, 15.64 and 18.27. The corresponding historical ratios are 6.91, 9.98 and 11.30. The current P/E Ratio is 33.05 based on a stock price of $6.94 and 2019 EPS estimate of $0.21. This stock price testing suggests that the stock price is relatively expensive.
Since we are near to the end of the year, I want to look at the P/E Ratio for 2020. It is 11.97 based on a stock price of $6.94 and 2020 EPS estimate of $0.58. This stock price testing suggests that the stock price is relatively cheap.
I get a Graham Price of $3.91. The 10 year low, median, and high median Price/Graham Price Ratios are 1.24, 1.54 and 1.83. The current P/GP Ratio is 1.87 based on a stock price of $6.94. This stock price testing suggests that the stock price is relatively expensive.
Since we are near the end of the year, we should also look at the Graham Price for 2020. It is $6.16. The P/GP Ratio would be 1.13 based on a stock price of $6.94. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median Price/Book Value per Share Ratio of 2.94. The current P/B Ratio is 2.39 based on a Book Value of $124M, Book Value per Share of $2.91 and a stock price of $6.94. The current ratio is 19% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 5.86%. The current dividend yield is 5.62% based on dividends of $0.39 and a stock price of $6.94. The current yield is 4% above the historical dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The 10 year median dividend yield is 5.70%. The current dividend yield of 5.62% is 1.4% below this yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The 10 year median Price/Sales (Revenue) Ratio is 0.40. The current P/S Ratio is 0.22 based on 2019 Revenue estimate of $1,358M, Revenue per Share of $31.94 and a stock price of $6.94. The current ratio is 46% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Since this is near the end of the year, we should probably also look at the estimated revenue and P/S Ratio for 2020. The P/S Ratio for 2020 is 0.20 based on 2020 Revenue estimate of $1,484M, Revenue per Share of $34.90 and a stock price of $6.94. This P/S Ratio is 50% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is probably cheap. The best test is the P/S Ratio test. It is showing the stock a relatively cheap. I am surprised that the dividend yield test is showing as cheap considering the fact the dividends have been cut lately. The P/B Ratio test is a good one. It is showing the stock as almost cheap.
Is it a good company at a reasonable price? Long term holders of this stock if bought at a reasonable price, could probably do well in this stock. However, it will be volatile, so you would have to be able to put up with this volatility. The current price is cheap.
When I look at analysts’ recommendations, I find Buy (3) and Hold (1). The consensus would be a Buy. The 12 month stock price consensus is $8.25. This implies a total return of 24.30% with 18.88% from capital gains and 5.6% from dividends.
See what analysts are saying on Stock Chase. There are few analysts following this stock. The last one said that construction is a tough business. Chris MacDonald on Motley Fool thought it was a good buy in 2017, but the stock is down around 30% since then.. A writer on Simply Wall Street say the P/E Ratio for this stock is higher than its peers, so it is probably relatively expensive. A writer on Simply Wall Street does not think that this is a good dividend stock.. Amanda Harley on Slater Sentinel says Raymond James gives this stock a price target of $9.00. Click somewhere outside the central message box on the page to see the report.
Bird Construction Inc, through its subsidiaries, operates as a contractor in construction market. It also provides pre-construction services, building information modeling and involves in public-private partnership projects. The company focuses on commercial, institutional, retail, tenant, residential, industrial, mining, water, wastewater, energy, and civil sectors. It operates its business in Canada. Its web site is here Bird Construction Inc.
The last stock I wrote about was about was Sienna Senior Living Inc (TSX-SIA, OTC- LWSCF) ... learn more. The next stock I will write about will be Element Fleet Management Corp (TSX-ENF, OTC-ELEEF) ... learn more on December 30, 2019 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
Thanks for interesting read about Bird Construction Inc. The spreadsheet of financial statements is interesting. It is interesting that Motley Fool thought it was a good buy in 2017, but the stock is down around 30% since then.ReplyDelete
I wonder what will happen with this stock in the future.
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